Remortgage buy to let to fund investment property


I was recently approached by a new client who had heard about Enness’ work and was looking to remortgage an existing buy to let (BTL) property in order to finance a new investment property. My client owned a successful company with his wife, dealing in IT technology and sales.

My client’s existing BTL property was in a highly desirable area of South East London and had recently been valued at £1.6million, though my client had outstanding finance on the property totalling around £550,000. The investment my client wanted to raise finance for was in fact next to their main residence, and he needed a further £460,000 to complete this purchase.

There were, however, a few barriers which needed to be overcome before we could proceed. Firstly, rental stress testing is particularly tight at the moment, so achieving the required loan amount through a mainstream lender would not have been a viable option.

Furthermore, my client’s BTL property was let to his own company, so lenders may have seen this as a conflict of interest. In addition, they had around £150,000 worth of unsecured debt within the property and, some months ago, it had been vacant.

At Enness, we are fortunate to be able to rely on an unusually wide network of lenders, making complex situations like this easier to mediate as I already had an idea which lender would listen to my client’s case.

The lender I chose was very precise and, owing to my good working relationship with them, I was able to negotiate a stress tested second charge at very favourable rates. The lender was willing to ignore the previous gap in the tenancy and was happy to proceed despite my client’s unsecured debt. The lender was also happy to accept their case even though the property was being let to his own company.

I succeeded in achieving the full loan amount of £460,000 on a 5.7% variable rate over a 15-year term. I also negotiated a blended rate which left the first charge mortgage untouched and was cheaper overall than a total refinance.

My client was delighted with the result and looks forward to working with us again in the future.